Legislature Passes Bill to Provide Relief and Improve Access to Unemployment Benefits

(BOSTON – 05/26/2020) The Massachusetts Legislature recently passed a bill that will provide additional Unemployment Insurance (UI) relief to low-income families, non-profit institutions and employers amid the COVID-19 pandemic. The legislation was signed into law by the Governor on May 27, 2020.

The bill, An Act Providing Additional Support to Those Affected by the Novel Coronavirus Through the Unemployment Insurance System, builds on UI legislation already signed into law that waived the one-week waiting period for residents to start receiving unemployment benefits. It also follows the recent passage of the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act), which significantly increased UI benefits and expands eligibility during the coronavirus pandemic.

“This bi-partisan legislation builds on our continued dedication to helping our workers and employers as they face financial hardship brought on by the COVID-19 pandemic,” said Senator Cindy F. Friedman (D-Arlington). “This bill will provide much-needed economic relief to residents across the Commonwealth who have lost their jobs in the wake of the pandemic.”

The components of the bill include:  

Protection for Employers. Employers participate in UI pay contributions based on their layoff experience. Like other forms of insurance, employers that are more likely to have workers use unemployment compensation are asked to pay more in the system. The system, however, does not anticipate a situation where employers across a number of sectors have been forced to significantly reduce their workforces due to situations outside of their control. This bill prevents layoffs related to coronavirus from negatively impacting employer’s future UI contributions. 

Extending Unemployment Benefit Period. The number of weeks of unemployment compensation available in Massachusetts is tied to unemployment rates around the state. This trigger did not anticipate a situation, however, in which unemployment grows rapidly in a very short period of time. This bill increases the unemployment benefit period from 26 weeks to 30 weeks when there is a significant uptick in weekly unemployment claims, as the system is experiencing currently. 

Lifting the Cap on Dependency AllotmentThis bill eliminates the 50% cap for the dependency allotment providing additional benefits to low-income families. This increase will be in addition to the $600 per week benefit add-on provided for in the CARES Act for all workers eligible for state or federal benefits. This provision is effective for 18 months after the end of COVID-19 emergency and the end of enhanced federal benefits.

Currently, UI recipients are entitled to an additional $25 per week for each child in the family, capped at 50% of a recipient’s base allotment. The result is that workers with particularly low allotments, such as low wage workers, can easily be capped out of receiving these additional amounts. 

Non-Profit Contribution Grace Period. Presently, many non-profits self-insure for unemployment claims. This means that when layoffs in the sector occur, non-profits pay the cost of those benefits dollar for dollar at the next billing period. This bill provides a 120-day grace period for non-profits to make these contributions. This delay will allow the state to review additional changes that are warranted to mitigate the impact on non-profits. The CARES Act provides 50% reimbursement for self-insured benefit payments during the coronavirus crisis.